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Titan Group announces its 2012 financial results

World Cement,

Financial results 2012

Greece’s Titan Group has announced its annual results for 2012. Turnover increased by 3.6% y/y to €1.13 billion, however EBITDA fell by 19.8% y/y to €196 million. The Group recorded a net loss (after tax and minority interests) of €24.5 million, following a net profit of €11 million in 2011. The loss reflects the continuing fall in construction activity in Greece and the fall out from the Eurozone crisis in the Southeastern European markets. In 4Q12, EBITDA rose by 46.3% y/y to reach €33.3 million and turnover came in at €283.6 million, up from €252.2 million in 4Q11. A net loss of €26.5 million was reported in 4Q12 compared to €42.9 million in the final quarter of 2011.*

Regional markets

Cement demand in Greece is estimated to have fallen to less than a quarter of the levels recorded in 2006 as the construction industry continues to feel the effects of the recession. Although the Titan Group doubled its exports in 2012, this did not completely mitigate the drop in domestic cement demand. As a result, EBITDA fell by 9% y/y to €32 million and turnover, including exports and the Group’s terminals in Europe, declined by 11% y/y to €240 million. The Group’s results in Southeastern Europe did not fare much better, with EBITDA dropping by 26% y/y and turnover coming in at €255 million, down 7% y/y.

Difficulties in Europe were offset somewhat by the US and Eastern Mediterranean markets. Group turnover in the US came in at €369 million in 2012, up 22% from 2011, while EBITDA also increased, rising from a €6 million operating loss to a positive €6 million. Total turnover for the Eastern Mediterranean region grew by 7% y/y to reach €296 million, as demand for construction materials continued to grow in Turkey and Egypt. However, operating margins in Egypt were hit by the rising price of natural gas and electrical power.

Cost savings and restructuring

In 2012, net debt was reduced by €112 million to €596 million. Between 2008 and 2012, Titan Group almost halved its net debt. Selling, general and administrative expenses were cut by 7.4% in 2012.

A two-year restructuring plan, which was launched in 2011, continued to be implemented. The target is to enhance operational efficiency and generate €26 million in annual savings. By the end of 2012, €25 million worth of savings had been achieved, exceeding the €23 million target set for this date. The restructuring initiative will be completed this year.

*The Group’s results for 4Q11 included implementation charges of €9 million in relation to restructuring plans. EBITDA for full-year 2011 included €25 million relating to the refund of the clay tax fee in Egypt.

Adapted from press release by Louise Fordham.

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